A Company Needs to Purchase Several New Machines to Meet

question 45

Essay

A company needs to purchase several new machines to meet its future production needs.It can purchase three different types of machines A,B,and C.Each machine A costs $80,000 and requires 2,000 square feet of floor space.Each machine B costs $50,000 and requires 3,000 square feet of floor space.Each machine C costs $40,000 and requires 5,000 square feet of floor space.The machines can produce 200,250 and 350 units per day respectively.The plant can only afford $500,000 for all the machines and has at most 20,000 square feet of room for the machines.The company wants to buy as many machines as possible to maximize daily production.
Formulate the LP for this problem.

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Definitions:

Higher Risk

Refers to situations or investments that are more likely to result in loss or have a greater variability of returns.

Efficient Markets Hypothesis

The theory that asset prices reflect all publicly available information about the value of an asset.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Speculative Bubble

A situation in financial markets where the price of an asset rises significantly higher than its intrinsic value, driven by exuberant market behavior.